Surprise, surprise, the latest Risklove playbook appears to be bogus inflation reports+ weak (but gives appearance of just a soft landing, because of inflation impacted retail numbers) housing= a buy orgy in stocks and bonds, who'd da thunk?
From my blog on Saturday:
So how will this transpire in real time? Hazarding a guess is more than a challenge when economic data is just pulled willy nilly out of their ass ( I mean hat), and the cognoscenti actually trade on it. After all, the Fed has told us they are "data dependant", gad, heaven help us. I described this in yesterday's blog. Armed with the COT clues, if one were to, for example, logically bet that Tuesday's producer prices might be hot, you could just as easily see it cold and be wrong for the moment. Ditto for Wednesday's consumer number. You could get a cold and a hot, or a hot and cold, or wouldn't cold, cold be a real chuckle? It's all random and made up, and ignores reality regardless. Or, ludicrous as it may be, it could be caused by "strong" economic data masquerading as inflation distortions. The ultimate farce would be for the Ministry of Truth to trot out good inflation data, coupled with strong economic numbers.
Remember, we are in Wonderland, so let's just mark our calender for the period of August 14-16 as "strange", and be prepared for about anything on economic "data" . While we are at it, as it is option expiration scam week, let's just call the whole frigging week as unusually strange. 1260 on the the SPY looks like maximum pain however, chuckle, chuckle. Still, my surmise, strange as it may transpire, is that somehow, some way, the bond market will start selling off (after rallying briefly first, who knows?) in the period leading up to the next FOMC meeting, and as the market begins to price in another rate hike. The Boyz will walk away flush with fresh trading profits. |
